The U.S. government is suing Sprint for invoicing excessive reimbursement figures as the company complied with court-ordered wiretapping, according to a story on Cnet.com.
The federal government claims the nation’s third-largest cellular provider overcharged government agencies, including the FBI and DEA, by as much as $21 million.
"Sprint inflated its charges by approximately 58 percent," the complaint reads. "As a result of Sprint's false claims, the United States paid over $21 million in unallowable costs from January 1, 2007 to July 31, 2010.”
Sprint claims it acted within the law. In an email quoted by Bloomberg News, Sprint spokesman John Taylor argued, "‘Under the law, the government is required to reimburse Sprint for its reasonable costs incurred when assisting law enforcement agencies with electronic surveillance.”
’‘The invoices Sprint has submitted to the government fully comply with the law,’’ Taylor wrote.
According to U.S. Attorney Melinda Haag, telecommunications companies can bill law enforcement agencies for expenses when they provide assistance for surveillance under court orders.
However, according to a story on Cellular-News.com, Sprint was not allowed to charge the government for systems upgrades. That rule came in 2006 when the FCC told telecommunications providers they had to pay for their own upgrades to some infrastructure in order to make it easier for government agencies to surveil suspect lines. Sprint and other cellular providers had been seeking clarification on that matter since the upgrades were ordered in 1994.
The Department of Justice, though, alleges that Sprint continued to bill for the disallowed upgrade charges between 2007 and July of 2010.
"Because Sprint's invoices for intercept charges did not identify the particular expenses for which it sought reimbursement, federal law enforcement agencies were unable to detect that Sprint was requesting reimbursement of these unallowable costs,” the lawsuit says.
The government is suing for three times the overbilled amount — $63 million — and other civil fines. The suit was filed at the U.S. District Court in San Francisco on Monday.
Taylor has said Sprint plans to defend the matter “vigorously.”